Smog lifts, but companies' view of polluted Delhi skies is dim

|By Rajesh Kumar Singh

|By Rajesh Kumar Singh

|By Rajesh Kumar Singh

NEW DELHI (Reuters) - As New Delhi grappled with its worst smog in 17 years, the head of India's largest mobile payment firm got on a plane and left, one of thousands of professionals escaping pollution that could cost the capital and the broader economy dear.

Vijay Shekhar Sharma, founder of PayTM payment start-up, left last Sunday for a temporary stay in Mumbai, worried about the impact of hazardous clouds of dust, smoke and fumes that hang over Delhi during the winter months.

"It became very visibly clear that it is going to be tough in Delhi, especially with young kids," Sharma said in Mumbai.

His company, which has considered moving from its base outside Delhi, has installed air purifiers, brought in plants and masks and offered extra health assistance.

Telecoms operator Idea Cellular and others have allowed more employees to work at home, and hired buses so that car traffic is reduced - all at their own expense.

A few companies are thriving from the heavy smog hanging over the city earlier this month - providers of face masks and air purifiers have seen sales soar.

But others, like the car manufacturers, are in the firing line of local and national politicians who want to reduce the deadly haze, while estate agents and tour operators have complained of a slowdown in business.

Delhi, home to around 17 million people, is among the fastest growing states in India. Its $84 billion economy has been expanding at more than 8 percent for the past two years, faster than a 7.4 percent national average.

Its air quality, meanwhile, has deteriorated, even by the standards of a country with some of the world's most polluted cities. Conditions had improved by Friday, but the problem is perennial and has been particularly acute this winter.

Companies have yet to tot up the cost of a week of coughing, spluttering and watering eyes, but local industry lobby group Assocham estimates "several billions of dollars" of new investments are under threat.

A study by the World Bank shows Asia's third-largest economy lost 8.5 percent of its GDP in 2013 due to air pollution.

"WORST ON EARTH"

Jones Lang LaSalle (JLL), a global real estate services firm serving large corporates, said some clients were reconsidering Delhi as a base, as costs of working there rise.

"This is increasing their operational costs as they are being made to spend more to provide a healthy workplace to their employees," said Santosh Kumar, a senior executive at the firm.

Delhi's image is deteriorating more widely, a headache for tour promoters and a government touting "Brand India".

Some local tour operators say they are already receiving requests from overseas partners to redraw the itinerary of foreign tourists to avoid even an overnight stay in Delhi. Business travelers say they are cancelling trips.

"The ongoing tourism season, which is yet to pick up, could see a maximum hit," Assocham said.

Expatriates are also thinking twice about living in the Indian capital. JLL's Kumar said more smog could see foreigners packing their bags, a blow to real estate as well as employment.

Lisa Akerman, a Swedish national who lives in an affluent Delhi neighborhood, said authorities needed to do much more than they were.

Akerman moved to the city two years ago with her family and has taken measures to ensure clean air in her apartment for her two small daughters. Still, the choking smog left her worried about their health.

Earlier this week, she decided to take them out of the city for a while.

"The pollution level is too much for the children," she said by 'phone from Goa, where she is camping with her kids. "While I love Delhi, its air quality will be a major consideration in deciding whether we want to extend our stay here."

NOT EVERYONE LOSES

The local government has taken steps to reduce traffic amid widespread public anger at pollution that has caused choking, wheezing and breathlessness.

Licenses are being withdrawn for diesel-powered vehicles older than 15 years, and authorities are considering resuming an "odd-even" scheme, under which cars can only travel in the city on alternate days depending on their registration number.

Those steps, and the risk that India's courts will impose stricter rules on emissions, are a potential blow to foreign and domestic carmakers, some of whom have asked for greater clarity.

But not everyone is complaining about the smog.

Japan's Daikin has seen sales of air purifiers increase by up to three times since the Hindu Diwali festival, and its stock that had been expected to last until March is exhausted.